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The Older Cling to Jobs, Crowding Out the Younger

THE proportion of Americans with jobs fell sharply during the Great Recession, and has barely begun to recover, according to overall figures.

In 2007, before the downturn began, 63 percent of working-age Americans held jobs. That proportion fell to just above 58 percent, and was a little under 59 percent last month.

But the underlying reality may not be that grim.

Over all, it appears that about one-third of the decline since 2007 can be accounted for by the natural reduction in the proportion of people working as more people reach retirement age. But that leaves two-thirds that came from the weak economy. Since employment bottomed in 2011, adjusting for demographics indicates that about half the decline has been reversed.

The accompanying charts show the proportion of both men and women working during the first four months of each year since 2007, broken down into the narrowest age brackets calculated by the Bureau of Labor Statistics. They do not consider why someone is not working. So those who are looking for jobs are treated the same as those who are still in school, staying at home to raise families or retired. Because the charts are based on the months of January through April, they include students with part-time jobs during the school year, but not those who took full-time employment during summer vacations.

In general, the older the group, the more likely it has been to hold onto jobs through the recession and recovery. In every age group above 62, the proportion of both men and women who are employed is higher than it was before the recession.

The Crowding Out Effect on Jobs

More people in their 60s and 70s are now working than before the Great Recession, but employment among young people is off sharply. Employment among people in the prime ages of 25 to 54 fell sharply during the recession, but has partly recovered.

Percentage of each group with jobs during

the first 4 months of each year

Men

Women

YOUNGER

WORKERS

AGE 16 TO 17

18 TO 19

20 TO 24

–

8.7

–

10.7

–

7.7

MEN

MEN

MEN

CHANGE ’07-’14

(PERCENTAGE POINTS)

–

6.5

–

9.0

–

5.0

WOMEN

WOMEN

WOMEN

70

%

60

50

40

30

20

10

’07

’14

’07

’14

’07

’14

25 TO 29

30 TO 34

35 TO 39

EARLY PRIME

–

6.3

–

4.0

–

4.6

MEN

MEN

MEN

CHANGE ’07-’14

(PERCENTAGE POINTS)

–

1.8

–

2.4

–

0.3

WOMEN

WOMEN

WOMEN

90

%

80

70

60

50

’07

’14

’07

’14

’07

’14

40 TO 44

45 TO 49

50 TO 54

LATER PRIME

–

2.8

–

4.3

–

4.3

MEN

MEN

MEN

CHANGE ’07-’14

(PERCENTAGE POINTS)

–

3.7

–

3.3

–

3.3

WOMEN

WOMEN

WOMEN

90

%

80

70

60

50

’07

’14

’07

’14

’07

’14

55 TO 59

60 TO 61

62 TO 64

TRANSITION

–

2.3

–

0.5

+

3.5

MEN

MEN

MEN

CHANGE ’07-’14

(PERCENTAGE POINTS)

–

1.1

+

0.4

+

2.8

WOMEN

WOMEN

WOMEN

80

%

70

60

50

40

’07

’14

’07

’14

’07

’14

65 TO 69

70 TO 74

75+

OLDER WORKERS

+

1.1

+

2.4

+

2.1

MEN

MEN

MEN

CHANGE ’07-’14

(PERCENTAGE POINTS)

+

2.0

+

1.8

+

1.1

WOMEN

WOMEN

WOMEN

40

%

30

20

10

0

’07

’14

’07

’14

’07

’14

Figures are not seasonally adjusted.

Source: Bureau of Labor Statistics, via Haver Analytics

Much of that change probably does not involve people getting new jobs, but instead shows that those with jobs are more reluctant to retire than their predecessors were before the recession. Such people may have greater fears about paying for retirement, reflecting both the fall in home prices during the downturn and the declining presence of defined-benefit pension plans. Even those with substantial savings may be concerned, with interest rates so low, that they can earn little on their savings without taking on significant amounts of risk.

Those decisions collectively may be having a crowding-out effect on younger workers, by not freeing up jobs that could prompt promotions for some and new hiring to replace those who were promoted.

If so, you may expect the biggest decline in employment to be among those just entering the labor force. And that is what happened. Among men age 20 to 24, the proportion working fell from 70.4 percent in early 2007 to 58.7 percent in early 2010. That figure has bounced back a little, to 62.7 percent this year. Many people in that age group are college students, of course, and may not be looking for work.

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Among men between the ages of 25 and 29 — an age when most are out of school — the proportion with jobs fell from 85.9 percent in 2007 to only 76.6 percent in 2010. It has since gone back to 79.6 percent, but that figure has barely budged over the last three years.

The declines among older prime-age workers have generally been smaller, reflecting, in part, the fact that more of those people were likely to have had jobs before the recession and have been able to hold onto them.

In almost all age groups, women did better than men during the downturn. Perhaps more women entered or re-entered the labor force to help out when their husbands lost work or took wage cuts. In addition, some of the hardest-hit occupations — particularly construction — were dominated by men.

A version of this article appears in print on May 10, 2014, on Page B3 of the New York edition with the headline: The Older Cling to Jobs, Crowding Out the Younger. Order Reprints|Today's Paper|Subscribe